gnf_ireland
Registered User
- Messages
- 1,441
Sorry, I should have said 14.4% per year14.4% is terrible!
Agree and disagree here ! trying to pick the top and bottom is foolish, but is it foolish to continue to hold no matter what?Trying to time markets is foolish.
Would I be better to leave my Pension Pot in ARF in the reasonable hope that it will continue to grow @ inflation + something , rather than lock it into an actual pension ?
Markets didn't crash in 2007 though, and when did this person get back into the market?
He or she would have missed upside on the way into the crash and upside on the way out while procrastinating.
@Gerry Canning The 4.1% comment is based on Marc post above on Shiller CAPE 10 ratio - of which I can honestly say I know nothing about.
Personally, I believe there is a correction due in the equity market, especially in the USA where S&P500 is at an all time high. I believe in the short term 1-2 years, equities will fall a bit. What I have been advised here on the posts above is that trying to time the market is a futile exercise, and better to just accept the roller coaster that it is
I think that is a bit unfair to be honest !This is probably the clearest example I have ever seen of why investors fail to make money from investing
Sorry if I sound a bit cynical about the "best tool" statement. I am sure it has value, but there are hundreds of stock market theories out there each with their own opinion on what is the best tool/theory etc etc.I don't know anything about the best tool for assessing stock market valuations
Estimating Future Returns
The best tool we have for estimating future stock returns is the Shiller CAPE 10 ratio. In the US the Shiller CAPE 10 currently at 27, the earnings yield is 3.7%. If we adjust for the Shiller CAPE10’s 5-year average lag in earnings, and the fact that real earnings tend to grow about 2% per year, we get a real return forecast for the S&P 500 of 4.1% (3.7 x [1 + (5 × .02)])......
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